Paris hotel cartel offers room disservice, says watchdog

Anyone willing to fork out €14,000 (£9,600) for a Paris hotel room is, on balance, unlikely to lose much sleep over the claim that they may have paid marginally over the odds. But lesser mortals learned yesterday that six super-deluxe hotels in the French capital were guilty of regularly exchanging confidential price information. In other words, operating a cartel.

France's competition watchdog on Monday imposed fines ranging from €55,000 to €248,000 on the half-dozen obscenely opulent and staggeringly expensive hotels known as the Palaces of Paris: the Bristol, Crillon, George V, Meurice, Plaza Athénée, and Ritz.

"It's the first time in France that this jurisprudence on exchanging information has actually been applied," said a competition council spokesman. "They basically agreed among themselves an average room price and occupancy rate. We consider it quite a big deal."

The heaviest fine was inflicted on the Crillon, the magnificent 18th-century neo-classical colossus overlooking the Place de la Concorde. With its cheapest room costing €500 a night (in low season) and its most expensive suite, the Bernstein, €8,000, its guests have included: the Emperor Hirohito and King George V; US presidents Hoover, Roosevelt, Nixon, Clinton and Bush; Elizabeth Taylor and Madonna.

The Ritz on the Place Vendôme, where rooms range from €610 to €8,500, breakfast costs €62 and past clients include King Edward VII and Lady Diana, was fined €104,000. Plaza Athénée, whose 450 sq metre (5,000 sq ft) Royal suite costs €14,000 a night, was fined €106,000.

The watchdog report, which followed a 2001 French television documentary, said the six hotels were a distinct, "oligopolistic" market and the exchange of information would falsify competition.

It said representatives of the hotels met regularly and exchanged mails frequently. Among evidence cited was a 2001 email sent by a George V manager to his rivals: "Please find enclosed our results. We await yours with interest." Attached was a table detailing the hotel's room occupancy rate and average room price.

According to the report, the average price of a room in the six hotels between 1999 and 2001 was €700 a night while an average suite cost €6,000.

France can be pleased about one thing, however: 90% of clients were foreign.